AT&T Feeling the iPhone Squeeze From Verizon

AT&T delivered a respectable set of numbers in its quarterly earnings report on Tuesday. At the same time, its report on Q2 activity revealed how much it still depends on Apple and its devices for its revenues.

First, the numbers: For the quarter ended June 30, 2012, AT&T’s consolidated revenues totaled US$31.6 billion, up 0.3 percent versus the year-earlier quarter. Second-quarter 2012 net income totaled $3.9 billion, or $0.66 per diluted share, up from $3.6 billion, or $0.60 per diluted share, in the year-earlier quarter.

Not Too Shabby

Total wireless revenues, which include equipment sales, were up 4.8 percent year over year to $16.4 billion. Wireless service revenues increased 4.3 percent, to $14.8 billion.

AT&T reported its best-ever wireless service margins of 30.3 percent versus 26.9 percent in the year-earlier quarter. It attributed the growth to improved operating efficiencies, fewer handset upgrades, and further revenue gains from its 43 million smartphone subscribers.

The company proudly pointed to other metrics as well: It posted a net increase in total wireless subscribers of 1.3 million in Q2 to reach 105.2 million in service. Its postpaid, prepaid and total churn reached their lowest levels ever — postpaid churn in Q2, for example, was 0.97 percent, compared to 1.15 percent in the same quarter last year and 1.10 percent in the first quarter of 2012. Total churn was 1.18 percent versus 1.43 percent in the second quarter of 2011 and 1.47 percent in the first quarter of 2012.

“These are very respectable results,” John Jackson, vice president of research at CCS Insight, told the E-Commerce Times.

In fact, AT&T’s performance was especially good considering the macroeconomic and global events that occurred during the quarter, he added, including the troubles in Greece, and growing worries domestically about the so-called fiscal cliff.

Focus on the iPhone

All that said, the quarterly earnings report underscores — yet again — AT&T’s reliance on the iPhone. Furthermore, the earnings highlighted a sobering trend: The iPhone as a percentage of AT&T’s smartphones sold to contract subscribers is dropping, noted Jackson. Two quarters ago, the iPhone accounted for of 81 percent of such sales. It was 78 percent last quarter, and 72.5 percent for Q2.

“The iPhone is still the dominant device for AT&T, but it is taking a relatively smaller and smaller share,” Jackson said.

This is largely attributable to people waiting for the iPhone 5, he added, and indeed AT&T has indicated — in a roundabout way — that it expects to sell far more phones in the second half of the year. It projects 25 million in unit sales for the year, Jackson said. “So far, they have done just over 10 million.”

For the most part, there is nothing alarming about the drop, Azita Arvani of the Arvani Group told the E-Commerce Times.

“This is just part of the normal product upgrade cycle, which should be incorporated in future projections,” she said.

In fact, a similar drop can be seen with Verizon Wireless, she added, with Verizon declining from 3.2 million units in Q1 to 2.7 million in Q2.

“Sprint will probably show a similar decline when it reports on July 26th,” Arvani said.

Reports of lagging iPhone sales are ubiquitous throughout the supply chain channel, Jackson pointed out. At the same time, suppliers are stock,piling relevant components in preparation for the iPhone 5 “for which everyone expects sales to be very robust.”

The real story is not the declining number of iPhone sales for AT&T or Verizon or Sprint for that matter, Arvani said. Rather, it is the fact that while AT&T is still the top U.S. iPhone seller, the gap between Verizon and AT&T iPhone sales has been shrinking over the last three quarters.

“We’ll wait and see how this plays out,” she said, “[how] the iPhone 5 — which is expected to run on LTE networks — will affect the sales across these two operators.”

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CRM Buyer Channels


Implementation of a New CRM Should Be Easy

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When CRM implementations fail, it's often because the product and its setup process are too complicated, time-consuming, and difficult for users to buy in. (Image Credit: Zoho)

Did you know that a third of all CRM implementations fail? That’s the conclusion of research cited by the Harvard Business Review. The same study found that one of the main reasons CRM implementations fail is that they’re too complex and don’t have a clear focus.

This is hardly surprising. Many CRM applications are highly complex. Migrating data to a new CRM, and getting everyone to use that CRM, is an involved task at the best of times. And the way many CRMs are built, and the way they require users to interact with them, means that implementation really isn’t the best of times.

The Problem With Piecemeal

Many CRMs consist of different applications that have been bolted together through a process of mergers and acquisitions. This makes the initial implementation complicated. Technical and line-of-business staff are forced to interact with different elements of the system in different ways, which makes the learning curve steeper.

It can also lead to duplication of effort, and asking people to repeat time-consuming tasks is sure to cause frustration and put them off using the system. A CRM implementation relies on engaging with and convincing users, from the C-suite right down to the people on data entry.

The more difficult that process is, the less users are likely to complete it. And even if they do complete the initial data migration and set-up, if your users find the CRM complex, disjointed, and time consuming, they won’t keep it up to date. This is possibly the main reason why CRM implementations fail: users simply refuse to use the new platform. As a result, the data it contains soon becomes outdated and incomplete.

So, what’s the best way to avoid this and ensure your investment in a new CRM pays off?

For a start, the CRM you choose should consist of applications and functions which have been designed from the ground up to work together. Migrating data should be easy, and wherever possible, users should only have to do it once to get their data populated to all relevant apps with the right permissions.

Companies should also look for signs that the relationship will be based on trust, right from the start. For instance, if the CRM vendor wants to charge a lot of money to help you overcome the complexity of the integration process, that’s potentially a sign that they view their customers as an ATM.

Users should find the CRM easy to get to grips with. Entering data should be an intuitive process that fits organically into each workflow. It should also be quick to do. Only this way will it become second nature to your colleagues, so that the data in the CRM is kept constantly up to date, making it relevant and actionable.

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Image Credit: Zoho

Designed for Success

To make these benefits a reality, it usually works best if a CRM has been developed as an integrated and seamless whole. At Zoho, all the features and functions in our CRM suite have been built, not bought, by our own development teams. And they are all designed from the concept stage onwards to work seamlessly together.

This level of integration results in a smoother implementation process. We calculate that the average implementation of Zoho CRM takes 50% less time than it would to implement our closest competitors. Over the last two years alone, we have helped users implement our CRM 30,000 times.

With the right technology, the right approach and the right partner, your CRM implementation won’t just succeed. It will give you the agility your company needs to respond faster to changing customer trends and preferences, in a market that evolves more rapidly with every passing day.

Get your free eBook from Zoho:
Top five things to consider when choosing a CRM System in 2022

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About Zoho
Software is our craft and our passion. At Zoho, we create beautiful software to solve business problems. We believe that software is the ultimate product of the mind and the hands.

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